Will Theravance Breathe Easy?

3/5/2012 10:34 AM ET

Chronic obstructive pulmonary disease, or COPD, that makes breathing difficult is mainly caused by smoking although it occurs in non-smokers too. According to reports, more than 12 million American adults suffer from COPD, and another 12 million Americans likely have this lung disease without knowing it.

Bronchodilators, Corticosteroids and Phosphodiesterase type 4 inhibitor are some of the approved treatment options for COPD.

A new medication for COPD, aimed to be a follow-up to blockbuster Seretide/Advair, which is in the works now, is Relovair, being developed by US biopharma firm Theravance Inc. (THRX: Quote) and partner, GlaxoSmithKline plc (GSK).

For readers who are new to Theravance, here's a brief overview of the company and the upcoming events to watch out for...

Theravance is focused on the development of small molecule medicines across therapeutic areas like respiratory disease, bacterial infections and central nervous system /pain.

The respiratory franchise includes, RELOVAIR for the treatment of COPD and asthma; GSK573719/vilanterol for COPD and GSK961081, a bifunctional muscarinic antagonist-beta 2 agonist, also for COPD, each partnered with GlaxoSmithKline, and TD-4208, an inhaled long-acting muscarinic antagonist.

The company's antibiotic product candidate is TD-1792 for the treatment of serious infections caused by methicillin-resistant Staphylococcus aureus, commonly known as MRSA.

The CNS/pain program includes TD-1211, an investigational drug designed to alleviate gastrointestinal side effects of opioid therapy without affecting analgesia, and TD-9855, an investigational norepinephrine and serotonin reuptake inhibitor for the treatment of attention-deficit hyperactivity disorder and chronic pain.

Relovair, the most advanced compound in the company's pipeline, completed a phase 3 registrational program for COPD in late 2011 while a phase 3 registrational program for asthma is expected to be concluded in the first half of 2012.

The COPD program included two 52-week exacerbation studies, which compared Relovair to Vilanterol, an investigational LABA, or long-acting beta-2-agonist. Relovair is a drug combining fluticasone furoate, an inhaled corticosteroid and Vilanterol.

In both the studies, Relovair demonstrated reductions in the annual rate of moderate to severe exacerbations compared with Vilanterol alone, though the reductions were not statistically significant in the second study.

There were side-effects like nasopharyngitis, upper respiratory tract infection, oral candidiasis, headache, COPD, back pain, pneumonia, bronchitis and sinusitis in the Relovair group. Moreover, there were also reports of fatal pneumonia for one particular dose.

In the asthma studies, RELOVAIR significantly increased time to first severe exacerbation and significantly decreased annual rate of severe exacerbations compared to fluticasone furoate alone. But the product candidate was associated with side-effects, like headache, nasopharyngitis, upper respiratory tract infection, bronchitis, cough, oropharyngeal pain and influenza in the asthma studies.

Nevertheless, Theravance and GlaxoSmithKline believe that the results are sufficient to submit the regulatory filings for Relovair for COPD and asthma.

Based upon the initial outcomes from the pivotal studies, GlaxoSmithKline intends to file applications seeking approval for Relovair for the indication of COPD in both the U.S. and E.U. in mid-2012.

A marketing application for RELOVAIR in the indication of asthma is expected to be submitted in the E.U. in mid-2012. GlaxoSmithKline is in talks with the FDA on the regulatory requirements to gain U.S. approval for RELOVAIR for asthma.

It remains to be seen whether RELOVAIR clears regulatory hurdles in its first go-around or is sent back to the drawing board.

If approved, RELOVAIR may succeed the biggest selling drug for COPD, namely GlaxoSmithKline's Seretide/Advair. In 2011, Advair/Seretide logged sales of roughly $8.1 billion. The drug lost patent protection in the U.S. in 2010 and its patent expires in Europe next year. A generic version of Seretide/Advair is yet to be introduced in the U.S. market.

Other partnered compounds in Theravance's pipeline are GSK573719/Vilanterol, under phase III testing for COPD and GSK961081 under phase IIb study, also for COPD.

There are seven studies underway in the phase 3a program of GSK573719/Vilanterol. The phase III program is expected to be concluded this year.

A phase IIb study of GSK961081 for COPD, which was recently completed - with topline data expected to be reported during the first half of 2012.

Also in the pipeline are,

*A phase IIb study of TD-1211 in patients with opioid-induced constipation and phase 2 proof-of-concept study with TD-9855 for ADHD that are underway.

* A phase IIa single-dose study of TD-4208 for COPD, whose positive topline results were announced last December.

* TD-1792, which successfully completed phase II studies in complicated skin and skin structure infections in 2007. The goal of this program is to develop a next-generation antibiotic for the treatment of serious infections caused by Gram-positive bacteria.

* TD-5108, a highly selective 5-HT 4 receptor agonist that has successfully completed a phase II proof-of-concept study in chronic idiopathic constipation. The back-up compound in the company's Gastrointestinal Motility Dysfunction program is TD-8954, and it has completed single-ascending and multiple-ascending dose phase I studies.

* TD-5108 is also being evaluated as a potential treatment for Alzheimer's disease and a phase I study assessing the compound's central nervous system penetration has been successfully completed.

Earlier in the year, Theravance regained full global rights to VIBATIV, a once-daily injectable antibiotic approved in the U.S., Canada and European Union, after Japan-based Astellas terminated its partnership with the company. Due to manufacturing issues, VIBATIV is currently subject to critical product shortages and regional supply outages in the U.S. In a recent SEC filing the company said that if the issues at the manufacturer are not promptly resolved, obtaining supply would require identifying and qualifying an alternative manufacturer, which could take 12 to 24 months. Theravance is evaluating global commercialization alternatives for VIBATIV either alone or with partners.

A quick look at Theravance's balance sheet...

The company's first approved product, VIBATIV, was launched in the U.S. in November 2009, and to date has generated only modest revenues. As of December 31, 2011, the company had an accumulated deficit of approximately $1.3 billion.

Net loss for full year of 2011 widened to $115.3 million or $1.41 per share from $83.86 million or $1.16 per share in 2010. Revenue in 2011 was $24.51 million compared to $24.22 million a year earlier.

The company had $240.9 million in cash, cash equivalents and marketable securities at the end of 2011.

Incorporated in November 1996 under the name Advanced Medicine Inc., Theravance began operations in May 1997. The company took on the name Theravance in April 2002. Theravance went public in 2004 , offering its shares at $16 each.

Shares of Theravance have lost 25% over the past three months. The stock has thus far hit a 52-week low of $12.91 and a 52-week high of $28.95. THRX is down 2.11% at $17.26.